In the wake of the 2008 housing crisis and Great Recession, Covenant Mortgage Company, a private commercial mortgage banking firm operating in the Pacific Northwest, faced a severe liquidity shortfall, struggling to service $200 million in loan assets held by 13 banks. Further compounding the crisis, the company’s principals had personally guaranteed $130 million in outstanding bank debt, heightening financial risk.

• Financial Modeling: Developed detailed asset valuation and cash flow models to illustrate the liquidity crisis and reassess personal guarantee values.
• Fiduciary Services: Acted as an out-of-court fiduciary to ensure transparency, lender equity, and credibility in financial reporting while operating within loan agreements.
• Negotiation & Workout Strategy: Secured standstill agreements and devised a structured asset liquidation and loan surrender plan to optimize recoveries and incentivize stakeholder cooperation.
• Dispute Resolution: Prevented disruptions by negotiating settlements to avoid preference recovery claims that could have undermined the broader resolution.
• Tax Strategy: Implemented a tax-efficient approach to mitigate liabilities for guarantors, improving financial outcomes.